HSBC plans autocallable CDs tied to HSBC Vantage5 (USD) Excess Return

By Angela McDaniels

Tacoma, Wash., Oct. 16 – HSBC Bank USA, NA plans to price 0% autocallable certificates of deposit due Oct. 30, 2024 linked to the HSBC Vantage5 Index (USD) Excess Return, according to a term sheet.

The CDs will be automatically called at par plus a call premium of 5% per year if the index closes at or above the call threshold on any annual call observation date. The call threshold is 103% of the initial index level on the first call observation date, 106% of the initial index level on the second call observation date, 109% of the initial index level on the third call observation date, 112% of the initial index level on the fourth call observation date, 115% of the initial index level on the fifth call observation date and 118% of the initial index level on the sixth call observation date.

If the index return is greater than or equal to zero, the payout at maturity will be par plus the index return. If the index return is less than zero, the payout will be par.

The index uses modern portfolio theory principles and the related concept of efficient frontier, aiming to maximize returns for a given level of risk. It has a volatility target of 5%.

HSBC Securities (USA) Inc. is the agent. Incapital LLC is distributor.

The CDs will price Oct. 25.

The Cusip number is 40434YQQ3.

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